City boosts support for NGOs

Times are tough, particularly for non-governmental organisations, which has prompted the City to look for more ways to help out.
THE City wants to strengthen its relationships with non-profit organisations (NPOs) in an effort to improve services for its poor and vulnerable residents.

Jak Koseff: NGOs play a crucial role in the development of the city Director of social assistance Jak Koseff: NGOs crucial in developing communities. The municipality is setting up systems and a dedicated workforce that will help NPOs with formal offices and communications infrastructure. Plans are also afoot to pay organisations per person served and use smart technology like SMSes to communicate with those who lack access to computers.

According to Jak Koseff, the director of social assistance in the department of health and social development, the City wants to empower and collaborate with more non-governmental organisations (NGOs).

It wants to put a stronger emphasis on capacity building for smaller, community-based NPOs so that they can access resources and use them more efficiently.

“In Johannesburg, as in major cities globally, NGOs and community-based organisations are longstanding collaborators in providing care to the vulnerable, enabling resilience in disadvantaged communities,” says Koseff.

Funding
He notes that the efforts of NPOs operating in Joburg have been under-funded and unevenly monitored by the City and other state entities which provide funding, prompting the City to action.

“Larger NGOs with developed capacity to describe and report on programmes at a more sophisticated level are more likely to receive funding through competitive application processes, [but] have not been drawn into more structured collaborations with the City.”

He says smaller organisations are often neglected because they lack the competency to use and account for funds efficiently. They also “do not deliver maximum value for clients”.

The Joburg 2040 consultations undertaken in 2011 revealed that the goals of empowering and caring for vulnerable people, which is shared by the public and the NGO sector, are not being realised, he says.

“The result is a broken safety net of programmes with shared intentions but little or no co-ordination, with state funds often applied reactively rather than strategically,” explains Koseff, adding that “this must change”.

Joburg 2040
“The [Growth and Development Strategy] 2040 consultations also produced much anecdotal evidence that the NGO sector sees itself both as exploited by the government and not co-ordinated with it.”

The City has over 6 000 non-profit organisations on its database. Its monitoring and evaluation show that financial management and accounting systems at the entry level of the non-profit sector are weak and that unsustainable percentages of funding are used for salaries and basic organisational costs rather than directly funding programmes, he explains.

The City requires that NPOs have a clear financial management system, record financial transactions and are accountable for funds disbursed to it by the City “on a payment citizen served basis”. They should be able to run basic office functions effectively and maintain basic record systems, as well as have the ability to produce auditable income statements, cash flow statements and ledger.

“Organisations should have a diversified funding base and compete regularly for donor funds from a variety of sources.”

The City offers NPOs capacity building training, non-financial support, expanded social packages per qualifying resident, service rebates, training and advice on getting funding and on management processes.

Documents
Koseff says any organisation that wants to collaborate with the City or get support should submit all its founding documents, including its constitution and governance structure, proof of not-for-profit status and registration number, detailed financial statements and bank account details, and a complete organisational needs assessment.

These requirements are laid out in the NGO capacitation and support unit, which falls under the department of health and social development.

An NGO should also bring certified copies of:

Its certificate of incorporation as a section 21 company;
Non-profit organisation certification;
A valid tax clearance certificate that is less than six months old;
Proof of PAYE registration;
VAT 103 registration;
Unemployment insurance fund (UIF) certificate;
Proof of banking; and
Audited financial statements.
If it is applicable, the NGO should also submit an affidavit confirming disability and certified copies of affiliation to any relevant professional or regulatory body. If it is a registered public benefit organisation (PBO), it must submit a copy of the PBO certification.

Financial support
“This will assist the department of community development in establishing priority eligibility for both financial and non-financial support where no other grounds for adjudication between completing applications exist,” Koseff points out.

Since the 2008 budget, the City has allocated over R7-million a year in direct support and rates rebates to NGOs that own their own properties. “This has flowed to both larger, established organisations and smaller, community-based groups. The experience of being in this support role has taught us several important lessons.”

Utilities and property-related costs have become a major cost driver, particular for organisations with residential programmes. This is just one of several ways in which it is becoming more difficult for NGOs to operate, and the City is looking into how it can help.

“This tool kit is currently a bold set of proposals. We ask the sector to be bold in response and work with us to build a new strategic relationship between NGOs, the government and the millions of disadvantaged residents we are both committed to serve.”